Bobi Ltd is a company specialising in custom made bags to suit each client's specific requirements.

Below are details of two orders:

On the 3rd of January 2021, Client Hileni placed an order for 180 toddler back packs at an agreed invoice price of N$140 per unit. This order was completed on the 18th of February 2021.

On the 14th of February 2021, Client Cleophas placed an order for 130 tablet pouches at a selling price of N$95. The production employees went on a wage strike from the 25th of February 2021, which is still not resolved. Consequently, client Cleophas's order is work in process.

Direct material

Purchased: N$22 000

Issued to production:

Client: Hileni - N$8 650

Client: Cleophas - N$4 270

Direct labour

Client: Hileni - N$5 600

Client: Cleophas - N$2 200

Manufacturing overheads

Budgeted manufacturing overheads N$21 000

Manufacturing overheads are absorbed using a machine hour basis. The normal monthly capacity is 600 machine hours.

Adjustment for over/under applied overheads is done to the cost of goods sold.

Actual manufacturing overheads totalled N$9 000.

Machine hours

Client: Hileni - 175 hours

Client: Cleophas - 95 hours

Requirement

Mark

Sub-total

Total

2.2.1

Calculate the total cost of Client Hileni's order; and the accumulated cost thus far of client Cleophas's incomplete order.

10

10

2.2.2

Calculate if Bobi Ltd over or under applied overheads.

3

13

2.2.3

Did Bobi Ltd make a profit on client Hileni's order? Provide calculations to support your answer.

5

18

Note: Show all the necessary workings or steps that are required to reach the answer. Marks are available for these